- 1 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 24TH DAY OF JANUARY, 2025 PRESENT THE HON'BLE MR. JUSTICE B.M.SHYAM PRASAD AND THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR MISCELLANEOUS FIRST APPEAL NO. 101497 OF 2022 (MV-) C/W MISCELLANEOUS FIRST APPEAL NO. 105102 OF 2023 (MV-) IN MFA NO.101497/2022: BETWEEN THE MANAGER, CHOLAMANDALAM MS GENERAL INSURANCE COMPANY, KRISHNA TOWERS, 1ST FLOOR, V.A. KALBURGI SQUARE, DESAI CROSS, DESHPANDE NAGAR, HUBBALLI-580029 NOW REPRESENTED BY ITS AUTHORIZED SIGNATORY. ...APPELLANT (BY SRI. SUBHASH J. BADDI, ADVOCATE) AND 1. SRI. SADASHIV S/O. BASAPPA CHINCHAKHANDI, AGE. 63 YEARS, OCC. SERVICE, 2. SMT. MAHADEVI W/O. SADASHIV CHINCHAKHANDI, AGE. 56 YEARS, OCC. HOUSE HOLD WORK, BOTH ARE R/O. MALLIKARJUN GALLI, HUNNUR, TQ. JAMAKHANDI, DIST. BAGALKOT 587 301. Digitally signed by VINAYAKA B V Location: High Court of Karnataka, Dharwad Bench - 2 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 3. SRI. RAMANNA S/O. SHANTAPPA PATIL, AGE. MAJOR, OCC. BUSINESS, R/O. IBRAHIMPUR, TQ. SINDAGI, DIST. VIJAYAPUR–561202. …RESPONDENTS (BY SRI. VIJAYKUMAR K. KOTIN, ADVOCATE FOR C/R1 & R2; SRI. ASHOK A. NAIK, ADVOCATE FOR R3) THIS MFA IS FILED U/S.173(1) OF MOTOR VEHICLES ACT, 1988, PRAYING TO CALL FOR RECORDS, HEAR THE PARTIES AND ALLOW THE APPEAL AS PRAYED FOR BY SETTING ASIDE THE JUDGMENT AND AWARD DATED 03.12.2021 PASSED BY THE PRL. SENIOR CIVIL JUDGE AND MACT, JAMKHANDI IN MVC NO.302/2019 WITH COST IN THE INTEREST OF JUSTICE AND EQUITY. IN MFA NO.105102/2023: BETWEEN 1. SRI. SADASHIV S/O. BASAPPA CHINCHAKHANDI, AGE. 64 YEARS, OCC. SERVICE, R/O. MALLIKARJUN GALLI, HUNNUR, TQ. JAMKHANDI, DIST. BAGALKOT-587119. 2. SMT. MAHADEVI W/O. SADASHIV CHINCHAKHANDI, AGE. 57 YEARS, OCC. HOUSEHOLD WORK, R/O. MALLIKARJUN GALLI, HUNNUR, TQ. JAMKHANDI, DIST. BAGALKOT-587119. ...APPELLANTS (BY SRI. VIJAYKUMAR K. KOTIN, ADVOCATE) AND 1. SRI. RAMANNA S/O. SHANTAPPA PATIL, - 3 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 AGE. MAJOR, OCC. BUSINESS, R/O. IBRAHIMPUR, TQ. SINDAGI, DIST. VIJAYPUR-586120. (OWNER OF TRUCK REG.NO.KA-28/C-9431). 2. THE MANAGER, CHOLAMANDALAM MS GENERAL INSURANCE COMPANY, 1ST FLOOR, V.A. KALABURGI SQUARE, DESAI CROSS, DESHAPANDE NAGAR, HUBLI-580029. (POLICY NO.3379/01856769/000/00 VALID FROM 30-10-2017 TO 29-10-2018) …RESPONDENTS (BY SRI. ASHOK A. NAIK, ADVOCATE FOR R1; SRI. SUBHASH J. BADDI, ADVOCATE FOR R2) THIS MFA IS FILED UNDER SECTION 173(1) OF MOTOR VEHICLE ACT 1988, PRAYING TO CALL FOR THE RECORDS AND ENHANCE THE COMPENSATION BY MODIFYING THE JUDGMENT AND AWARD PASSED IN M.V.C NO.302/2019 ON THE FILE OF PRL. SENIOR CIVIL JUDGE AND MACT JAMKHANDI DATED 03.12.2021 BY ALLOWING THIS APPEAL WITH COSTS, IN THE INTEREST OF JUSTICE AND EQUITY. THESE APPEALS HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 09.01.2025 COMING ON FOR PRONOUNCEMENT OF JUDGMENT, THIS DAY, B.M.SHYAM PRASAD J., DELIVERED THE FOLLOWING: CORAM: THE HON'BLE MR. JUSTICE B.M.SHYAM PRASAD AND THE HON'BLE MR. JUSTICE RAMACHANDRA D. HUDDAR - 4 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 CAV JUDGMENT (PER: THE HON'BLE MR. JUSTICE B.M.SHYAM PRASAD) These appeals are by an Insurer and the Claimants in MVC No. 302/2019 on the file of the principal Senior civil Judge and MACT, Jamakhandi (for short, ‘the Tribunal’) calling in question the Tribunal’s judgment and award dated 03.12.2021 The appeal by the Insurer [M/s Cholamandalam General Insurance Co.] is in MFA No. 101497/2022, and the appeal by the Claimants [the dependents of a deceased] is in MFA No. 105102/2023. The Tribunal has awarded a total sum of Rs.18,79,360/- to the Claimants along with interest at 6% per annum with directions that 50% of this amount shall be released immediately and that the remaining 50% shall be in deposit with the nationalized/scheduled bank for three [3] years. 2. The Tribunal has arrived at a sum of Rs.23,49,200/- as compensation that should be paid to the claimants, but the Tribunal, opining that the rider of the motorcycle has also contributed to the accident, has held that the claimants, the parents of the deceased young girl - 5 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 who was on the pillion of the motor cycle, will be entitled to only 80% of such mount as compensation. Accordingly, the Tribunal has awarded a sum of Rs.18,79,360/- as compensation to the Claimants. The Tribunal has computed Rs.23,49,200/- under the following heads. Sl. No. Head of Compensation Amount 1 Loss of Dependency Rs.22,84,200.00 2 Loss of love and affection to the Claimant No. 1 and 2 [the parents of the deceased] Rs.50,000.00 3 Funeral Expenses Rs.15,000.00 Total Rs.23,49,200.00 The Tribunal, in the course of the impugned judgement, has observed that the Insurer must pay compensation to the Claimants and recover the same from the owner of the Truck bearing registration No. KA-28 C-9431 [the other vehicle involved in the accident, which is referred to as ‘the Truck’], but the Tribunal has not included this direction in the operative portion of the judgement, and therefore, this direction is not a part of the award. - 6 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 3. Sri Subhash J. Baddi, the learned counsel for the Insurer, and Sri Vijaykumar Kotin, the learned counsel for the Claimants, are categorical that the questions for consideration in these appeals are about [a] the Insurer’s liability, [b] the merits of the deduction towards contributory negligence and [c] the just and reasonable compensation to the claimants because it is undisputed that the deceased [Ms. Sridevi C] has died in a road accident on 25.10.2018 when she was riding on the pillion of the motorcycle [bearing No. KA.48 Y 1332] and that the accident is because of the collusion between the Truck and the said Motor cycle. 4. As regards the Insurer’s liability to pay just and reasonable compensation to the claimants, Sri Subhash J. Baddi canvasses that the Insurer’s defence is that the driver of the Truck did not possess a valid driving license but the Tribunal has not considered this defence while concluding that the Insurer must pay compensation to the claimants and then recover from the owner of the Truck. Sri Subhash J. Baddi also contends that Tribunal has erred in computing loss of dependency taking the monthly income at - 7 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 Rs.11,750/- with the addition of 50% of such income towards future prospects and deducting 50% towards personal expenses. On the question of deduction towards negligence by the rider of the motorcycle and the just and reasonable compensation, Sri. Vijaykumar Kotin cannot contest that the deceased [a pillion rider] will be a third party and as such there cannot be deduction and that this Court must take notional monthly income of the deceased at more than Rs.11,750/- which is the notional monthly income of an unskilled labour evolved for settlement in Lok- Adalat. 5. The Insurer disputes its liability to pay compensation to the claimants to indemnify the owner of the Truck, or to first pay to the claimants and then recover from the owner of the Truck, contending that the driver of the Truck was driving the vehicle without a license. The Insurer also contends that the owner has not furnished the details of the driving license despite being served with the notice. The Owner has not filed Written Statement, and as such, the Insurer’s defence that the owner of the Truck has not - 8 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 informed the Insurer about the accident and has not furnished the relevant documents and that the jurisdictional police have filed chargesheet as against the owner and also the driver of the Truck for different offences, including the offences punishable under sections 3 and 5 of the Motor Vehicle Act, 1988 [the MV Act], remain unrebutted. 6. The Claimants have examined one of them as PW 1 and marked the academic credentials of the deceased [Ms. Sridevi C] such as Under Graduation/Post Graduation Mark Sheets and the Certificate issued upon completion of the relevant Certification Course. The claimants have produced copies of the FIR [Ex–P -1], Post- mortem Report [Ex–P – 4], MV Report [Ex–P – 5], Inquest Panchanama [Ex–P – 6], and they have also produced the Chargesheet [Ex. P 7]1. The Insurer has examined one of its officers as RW-1, and it has produced the correspondences with the jurisdictional Regional Transport Officer for the 1 The learned counsel for the Insurer, in the course of the hearing, has stated that the owner and the driver were initially convicted for the offences charged against them, but they have been later acquitted in the appeal. However, the copies of these judgements are not placed on record. - 9 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 details of the accident and Driving License of the Truck Driver. 7. The Tribunal, while considering the Issue on whether the Insurer or the owner of the Truck will be liable to pay compensation to the Claimants, has opined that the Insurer must pay the compensation to the claimants and recover the same from the owner of the Truck because it has failed to produce documents to establish the Insurer’s liability. The Tribunal referring to a Full Bench decision of this Court in New India Assurance Co. Ltd., v. Yallavva W/o Yamanappa Dharanakeri2 has held that the different decisions relied upon by the Insurer [though the Tribunal has not specifically referred to any set of decisions] must be distinguished in the facts and circumstances of the case. 8. Sri Subhash J. Baddi contends that irrefutably the Truck Owner has not produced the details of the Driver’s license either in the proceedings with the Tribunal or in the present appeal proceedings, and therefore, 2 [ILR 2020 Kar 2341 - 10 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 the Insurer cannot even be made liable to pay and recover. The learned Counsel relies upon the following decisions of a coordinate Bench of this Court emphasizing that the recent decision of this Court is that an Insurer can successfully deny even the liability to pay and recover the compensation if it is established that the concerned driver did not possess a valid license as on the date of the accident. The learned counsel relies on these decisions: [i] The decision in MFA No. 3297/2019 which is decided on 13.04.2023, [ii] The decision in MFA No. 615/2019 which is decided on 14.12.2023. 9. In the light of these circumstances, the questions for consideration are: [i] Whether the Tribunal has determined just and reasonable compensation in computing Rs.23,49,200/- to the claimants. [ii] Whether this Court must interfere with the Tribunal’s direction to the Insurer to - 11 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 pay to the claimants 80% of compensation applying the principle of contributory negligence and recover the same from the Truck’s owner. Reg: Question No. [i]: 10. The Tribunal has computed loss of dependency in a sum of Rs.22,84,200/- thus: Income Rs.11,750.00 50% Towards personal expenditure Rs.5,875.00 Addition of 40% towards future prospects Rs.4,700.00 Monthly Income with the addition towards future prospects Rs.10,575.00 The Annual Income Rs.1,26,900.00 Multiplier 18 Loss of Dependency Rs.22,84,200.00 Sri Subhash J. Baddi contends that the Tribunal should have deducted towards the deceased’s personal expenditure after adding future prospects to the national income, but the Tribunal has deducted personal expenditure only from the notional income. This Court finds considerable force in this - 12 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 submission, and the Loss of Dependency must be computed accordingly. 11. The claimants have produced the academic records of the deceased as also the deceased’s Certificate in Computer Training. These exhibits are marked as Exs.P10- P22. It is seen from these documents that the deceased has been a bright student right through and has completed her Post Graduation in Science while simultaneously pursuing a course in Computer Training. The deceased’s father, who is examined as PW1, has also deposed that the deceased, because she was keen on pursuing her career in teaching, had enrolled for B.Ed. in a private college as against a government seat. The Tribunal, in the light of this evidence, has taken the notional monthly income of the deceased at Rs.11,750/-, an income evolved for settlement in Lok Adalat for the accidents in the year 2018. The Tribunal has deducted 50% towards personal expenditure and added 40% of Rs.11,750/towards future prospects. 12. Sri. Vijaykumar Kotin canvasses that : - 13 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 [a] the monthly income at Rs.11,750/- is taken in the cases arising out of accidents in the year 2018 by the Tribunals/ Courts when there is evidence of the victim being employed but there is no evidence of actual income and also when the victim is treated as an unskilled labour, [b] that the deceased, with academic credential as above, cannot be called an unskilled labourer and Loss of Dependency decided based on the salary of an unskilled labourer. 13. The learned counsel emphasises that this Court must in the least take the notional income of the deceased at Rs.20,000/- per month adding 40% thereof towards future prospects and grant just compensation deducting 50% therefrom with 18 as the multiplier because the deceased was only aged 23 years as of the date of the accident. Sri. Subhas J. Baddi argues that it is undisputed that the deceased, despite her academic credential, was not employed and that the Tribunal, only because a potential is - 14 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 established, has rightly taken the income of the deceased at Rs.11,750/- per month. 14. These rival submissions as regards the Loss of Dependency are considered. This Court must observe that it remains indisputable that the notional monthly income of Rs.11,750/- is taken in the cases arising out of the accidents in the year 2018 for settlement in Lok Adalat when there is no proof of actual income based on the reasoning that even an unskilled labour would be paid, in the minimum, such amount. In the present case, the deceased had completed her post graduation in Science and had also enrolled herself for B.Ed. against a government seat after training in computers in a certificate course. 15. Further, the claimants have stated in evidence that the deceased was pursuing her academic career to find herself a teaching job and that her chosen subjects in Post Graduation were Mathematics and Physics. These undisputed circumstances do render credence to the claimant’s case that, but for the unfortunate demise, the - 15 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 deceased would have pursued her career to be employed in a teaching job, and therefore, this Court is of the considered view that it will not be fair to take the notional income of the deceased at Rs.11,750/- [the notional income for an unskilled labour]. 16. However, the question as to the amount that must be taken as the deceased’s notional income will remain a vexed question which does not render itself to an easy answer, and this question must be considered in view of the settled law that the Tribunals/ Courts, in awarding just and reasonable compensation, must ensure that there is no bonanza to the claimants. When this question is thus examined in the peculiarities of this case, this Court is of the considered view that the deceased’s notional income, given all the vagaries of life and that the deceased was still a student, must be taken at Rs.18,000/- per month and loss of dependency calculated accordingly retaining the same parameters but deducting personal expenditure even from future prospects. The computation of loss of dependency will be as follows:- - 16 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 Income Rs.18,000.00 Addition of such Income at the rate 40% towards future prospects Rs.7,200.00 Monthly Income with the addition towards future prospects Rs.25,200.00 50% Towards personal expenditure Rs.12,600.00 The Annual Income Rs.1,51,200.00 Multiplier 18 Loss of Dependency Rs.27,21,600.00 Enhancement [Rs.27,21,600 – Rs.22,84,200] Rs.4,37,400.00 17. The claimants will also be entitled for loss of consortium and conventional heads at the rate of Rs.40,000/- [per claimant with addition @ 10% for every block of three years] and conventional expenses of Rs.30,000/-. As such, the Question No. [i] is answered in favour of the claimants holding that they will be entitled for a total compensation of Rs.28,47,600/- as against the total award of Rs.23,49,200/- resulting in an enhancement in Rs.4,98,400/-. The enhancement will be as follows: - 17 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 By Tribunal By this Court Description Loss of dependency Rs.22,84,200.00 Rs.27,21,600.00 Loss of Love and affection Rs.50,000.00 Rs.96,000.00 Funeral and Transportation Expenses Rs.15,000.00 Rs.30,000.00 Total Rs.23,49,200.00 Rs.28,47,600.00 Difference/ Enhancement Rs.4,98,400.00 Reg: Question No. [ii]: 18. At the outset, this Court must observe that the deceased was on the pillion of a motor-cycle and the accident is because of a collusion between this motorcycle and the Truck and that these circumstances irrefutably establish that the deceased is a third party [not being a party to the contract between the Insurer and Truck owner or his agent]. The fact that the deceased and her parents, who assert loss of dependence on her demise, are third parties must be crucial in deciding whether the Insurer must first pay the claimants just and reasonable compensation and then recover it from the Truck Owner. - 18 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 19. The Insurer denies its liability to indemnify the owner of the Truck, and to even pay compensation to the claimants and recover from the owner of the Truck, because the driver of the Truck did not possess a driving license. If the driver of the Truck indeed did not hold a Driving License, it would be one defence to an Insurer because of Section 149[2][a][ii] of the M V Act3 resulting in possible exclusion of 3 Section 149 [2] No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the Court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as execution is stayed thereon pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto and to defend the action on any of the following grounds, namely— [a] that there has been a breach of a specified condition of the policy, being one of the following conditions, namely- [i] a condition excluding the use of the vehicle— [a] for hire or reward, where the vehicle is on the date of the contract of insurance a vehicle not covered by a permit to ply for hire or reward, or [b] for organised racing and speed testing, or [c] for a purpose not allowed by the permit under which the vehicle is used, where the vehicle is a transport vehicle, or [d] without side-car being attached where the vehicle is a motor cycle; or [ii] a condition excluding driving by a named person or persons or by any person who is not duly licensed, or by any person who has been disqualified for holding or obtaining a driving license during the period of disqualification; or - 19 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 its liability. The circumstances in which this defence can be invoked and how it should be assessed by Tribunals/ Courts has been considered by a Full Bench of this Court in New India Assurance Co. Ltd. V. Yallavva and another [supra], a decision relied upon by the Tribunal in holding the Insurer liable to pay and recover the compensation. The Full Bench’s decision in this case is on a reference on the questions whether an Insurer can be made to pay and recover compensation if there is a breach of a policy condition enabling a defence under Section 149 [2] of the MV Act. 20. The Full Bench decision is in the light of the different decisions of the Apex Court, including the decision in National Insurance Company Ltd., v. Swaran Singh4. The Coordinate Bench in its decisions in MFA No. 3297/2019 and MFA No. 615/2019 [the two decisions relied upon by Sri Subhash J. Baddi] has referred to the Apex [iii] a condition excluding liability for injury caused or contributed to by conditions of war, civil war, riot or civil commotion; or 4 [2004] 3 SCC 297 - 20 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 Court’s decision in National Insurance Company Ltd., v. Swaran Singh [Supra], but has not referred to the Full Bench’s decision. This Court must consider the merits of the Insurer’s defence that it cannot even be made liable to pay compensation to the claimants and recover from the Truck owner in view of the law exposited by the Full Bench and the irrefutable fact that the deceased is a third party and the claim is by her parents. 21. The Full Bench’s decision on this facet [per Justice B V Nagarathna as a Judge of this Court] is in these paragraphs: 36. Thus, on a reading of Section 149, it becomes clear that when third party risks are involved or when the victim of the accident is a third party, such risk being compulsorily covered under sub-Section (1) of Section 147, any exclusion in the policy must be suitably interpreted having regard to the main purpose for which an insurance contract is entered into. In Swaran Singh the Hon’ble Supreme Court has enumerated the aforementioned twin tests - 21 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 in the above context. It is only when both the tests are satisfied that the insurer could be permitted to pay and recover from the insured as per the proviso to sub-Section (4) of Section 147 otherwise, no pay and recovery order could be made and the insurer has to satisfy the award. 37. Thus, what follows is that, in regard to third party rights, the insurer can defeat such rights under Section 149(2)(a) by proving a breach of the condition of the policy and further, proving that the same is a fundamental breach. In such an event, the insurer can only mitigate its liability, and the insured would be liable to satisfy the judgment vis-à-vis the insurer who would have satisfied the claim of the third party in the first instance. Therefore, the insurer cannot defeat a third party claim by any exclusion in the policy having regard to the four comers of Section 149(2)(a). It can only mitigate its liability by seeking recovery from the insured on proof of the exclusion clause as per the twin tests enumerated by the Hon’ble Supreme Court. This is the object of Section 149(4) and the proviso thereto which contemplates pay and recovery order to be made against the insurer who has been - 22 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 notified in a claim proceeding instituted by a third party under Section 149(1) of the Act. The underlining is by this Court 38. To this, another nuance may be added. What would be the position when the insurer is able to prove a breach of the policy, but the said breach is not a fundamental breach or the breach did not contribute to the cause of the accident but what could be termed as an innocent breach and not an intentional one. In such a case also, the Insurance Company must pay to the third party and recover from the insured. This could be illustrated with reference to the vehicle not being covered by a permit to ply for hire or reward. The Hon’ble Supreme Court in the case of Amrit Paul Singh v. Tata-AIG General Insurance Co. Ltd [(2018) 7 SCC 558 : AIR 2018 SC 2662.], held that the vehicle not having a permit at all and being used for hire or reward is a case of fundamental breach and hence, the insurer though absolved of its liability had to pay the compensation and recovery order was made in the said case permitting recovery from the insured. Also, when a vehicle had a permit to ply within a particular area or on a route deviated from the said area or route and was plying in another area or route and an accident occurred, then it is not a case of fundamental breach, - 23 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 although, there is a violation of the terms of the policy. In such an event also, the pay and recovery order has been made in the case of Rani v. National Insurance Company Ltd. [(2018) 8 SCC 492.] , by the Hon’ble Supreme Court. 22. Thus, the Full Bench has exposited that the Insurer’s liability is mitigated even when it has successfully answered the twin tests viz., the breach of a condition of the policy and a fundamental breach [in the sense that the breach has brought about the accident], and that such liability is also mitigated when the breach of a condition of a policy is established, but is shown that such breach is neither intentional nor fundamental. The Insurer’s lability is mitigated in both these circumstances because the Insurer, after the compensation is paid to a third party, can recover the same from the Insured. However, these propositions will not apply when the claimant/s and owner have colluded in bringing about a contract of insurance, but this is not germane in the present case as no such defence is taken. 23. The Insurer has relied upon two circumstances to establish its defence that the Truck owner has permitted a - 24 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 person without a driving licence to drive the Truck in breach of the conditions of policy as is contemplated under Section 19[2] of the MV Act. These circumstances are that the Truck owner has not furnished the details of the driver when notice is issued and that the driver of the Truck is convicted for the offence punishable under the provisions of the MV and for driving without a license. The Insurer, to prove its case that notice is issued to the owner of the Truck to furnish the details, has examined one of its officers [RW1] who has produced the copies of the notice issued to the owner of the Truck. The owner has remained silent in the proceedings before the Tribunal and in the present proceedings. This Court must therefore opine that the Owner has deliberately withheld the information because any information in that regard would go against him. As such, this Court is of the considered view that the Insurer has established a breach of a condition of the policy but it cannot deny liability to the claimants, the parent of a deceased who was on the pillion of another vehicle [and hence, third partiers]. - 25 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 24. As per the Spot Mahazar [Ex. P–3] the accident is at a corner and in the centre of the Road. The Insurer had to bring on circumstances to establish that the driver’s inability to drive the Truck has brought about the accident. The Insurer has led no evidence in this regard. Therefore, it cannot be reasonably opined that the accident is because the driver was not holding a licence, and the Insurer has not even alleged that the Truck Owner was negligent in entrusting the Truck to an unlicenced Driver. Hence, this Court is of the opinion that a fundamental breach is not established, nevertheless, as held by the Full Bench, the Insurer will be liable to pay compensation to the claimant and recover from the Owner of the Truck. 25. The Tribunal, in apportioning 20% of contributory negligence to the rider on the motorcycle, has observed that this rider did not hold a valid driving license; that he was the deceased’s friend; that though the police have filed charge-sheet against the driver of the Truck, the material on record indicate that the claimants have attempted to conceal certain facts; and that the Investigating - 26 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 Officer has also not collected material that would lead to a reasonable inference that the driver of the Truck is negligent. The deceased was a pillion rider, and none of the above circumstances in any manner lead to the conclusion that the deceased was negligent or she in any manner has contributed to the accident. Therefore, this Court must observe that none of the circumstances counted by the Tribunal can affect the compensation that is payable to the Claimants, the parents of the deceased. The question No. [ii] is answered in favour of the claimants. In the light of the about the following:- ORDER [a] The Insurer’s appeal in MFA No. 101497/ 2022 is rejected and the Claimants’ appeal in MFA No. 105102/2023 is allowed in part granting an enhanced compensation in a sum of rupees in Rs.4,98,400/- along with interest at 6% per annum from the date of the petition with the Tribunal till the date of deposit. - 27 - NC: 2025:KHC-D:1392-DB MFA No. 101497 of 2022 C/W MFA No. 105102 of 2023 [b] The Insurer shall deposit the compensation of Rs.28,47,600/- [including the enhanced compensation Rs.4,98,400/-] with the Tribunal within 8 [eight] weeks from the date of receipt of a certified copy of this order. [c] The amount deposited by the Insurer in its appeal in MFA No. 101497/2022 shall be transmitted to the Tribunal for disbursement according to its directions on apportionment and deposit. [d] The Insurer will be entitled to recover the amount deposited in execution of the award. The office is directed to draw award accordingly. Sd/- (B.M.SHYAM PRASAD) JUDGE Sd/- (RAMACHANDRA D. HUDDAR) JUDGE RSH/CT-VP list no.: 1 sl no.: 55